Where do we go from here? A look at Washington's would-be marijuana entrepreneurs

Pete O'Neil, carrying a sign for a retail marijuana shop he wanted to open, is one of the entrepreneurs who lost in a state lottery for retail marijuana store licenses. He plans to convert his Seattle store into a medical marijuana dispensary. Karen Ducey/Puget Sound Business Journal

The UpTake: They put in the work and investment. But these entrepreneurs lost out when it came to getting a license from Washington state to open recreational marijuana shops. Now they're left wondering whether to sue the state, or go the medical pot route.

His first order of business is to convert his plans for a retail store in Seattle into a medical marijuana dispensary that complies with Initiative 502 rules. It still remains unclear what will happen to medical marijuana in Washington, but this approach will allow him to open for business while the state sorts it out.

â€œWho knows? It may be more profitable and there wonâ€™t be a shortage of product,â€ he said.

He had applied for three retail licenses for the company, one each in Seattle, Lynnwood and Bremerton.

Oâ€™Neil said the LCB put his application for the Lynnwood store into the Seattle lottery, so heâ€™s still hopeful the agency will work with him to make something happen at that location. He would still have to litigate with the city of Lynnwood, as it currently has a moratorium on marijuana shops.

Bremerton city officials told Oâ€™Neil that he canâ€™t open a medical dispensary at his location there, but heâ€™s in talks with a lottery winner to buy the business (and with it the retail license). He would then open a retail store under his own companyâ€™s name.

Itâ€™s still unclear how the legalities of all of this will work out. The LCB has said lottery winners canâ€™t sell their licenses, but they can sell their entire business. That's a loophole that could work for people like Oâ€™Neil.

For now, heâ€™s focused on moving forward on the dispensary at his Seattle location.

â€œIt could be shut down in six months or a year, but we tried to play by the rules and it just didnâ€™t work out,â€ he said.

Valerie Bauman covers nonprofits and health care for the Puget Sound Business Journal.

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